Should Microsoft have purchased YouTube?

Just over two years ago, there were reports that Microsoft was looking to acquire YouTube.

But when Google jumped in and bought YouTube for $1.65 billion, Microsoft said in a statement that while it, too, had “evaluated acquiring this type of technology” it had decided that building its own video-sharing service would be “a more cost-effective way to compete.”

So, did Microsoft make the right choice?

Microsoft ended up launching MSN Soapbox, its own video uploading service, which you can easily access today via a tab on MSN Video.

Certainly, the choice was “cost-effective.” It’s unclear how much Soapbox cost to build but it presumably did not cost $1.6 billion.

There has also been talk that Google overpaid for YouTube, considering that Google has had trouble monetizing the site. (Google CEO Eric Schmidt has dismissed those concerns, saying this fall that the company had the “luxury of time.”)

But it seems that Microsoft has not found a “way to compete.”

Here’s a statistic: Two videos were uploaded on Soapbox during the last hour (one in Spanish).

On YouTube, 80 videos were uploaded during the span of just one minute.

That seems to mesh with a comScore report out today showing that Google continues to dominate Microsoft in the online video market.

In October, Google had a 39.7 percent share of the online video market to Microsoft’s 2.1 percent. A year ago, Google had a 28.3 percent share to Microsoft’s 2.1 percent.